Next Generation ACO Model Saves $62M in First Year, CMS Reports

The first cohort of accountable care organizations (ACOs) in the Next Generation model generated net savings to Medicare of approximately $62 million while maintaining quality of care for beneficiaries for the 2016 performance year, according to a new evaluation report released by the Centers for Medicare & Medicaid Services (CMS).

The report was prepared by NORC at the University of Chicago, an independent social research organization. CMS Administrator Seema Verma said the 2016 Next Generation ACO performance shows “promising early results” and noted that the results demonstrate “the positive outcomes in terms of quality and costs when providers are responsible for managing to a budget.”

“These results provide further evidence that ACOs succeed under two-sided risk,” Verma said in a statement. “ACOs in the Next Generation Model are being held accountable with strong financial incentives and are provided with substantial flexibility and regulatory relief. They are delivering value and providing quality care to patients and taxpayers even in their first performance year, and we believe that these results are achievable for other ACOs under similar incentives.”